Reinsurance

Good faith and coverage

The number of cases arising out of the events of 9/11 continues to rise. In Rendall v Combined Insurance Co of America [2005] EWHC 678 (Comm), forthcoming in [2005] Lloyd’s Rep IR, claims were made by the dependents of employees of Aon Corporation under a group business travel accident (BTA) policy taken out by Aon for their benefit. These were paid by the US insurers, but London market reinsurers raised both good faith and coverage defences and sought declarations that they had validly avoided the reinsurance and that by the terms of the reinsurance there was no coverage. In the event the reinsurers failed on their good faith arguments but succeeded in their coverage defence.